Current Events in February 2006

The U.S. Agriculture Department's Inspector General warns beef inspectors aren't strictly following cattle screening rules, increasing the risk of mad cow disease in the nation's meat supply.

The report said it found cases where rules covering the slaughter of cattle were being ignored.

For example, 29 suspect cows were slaughtered at two of a dozen meatpacking plants reviewed in an audit. The report says the animals were incapable of walking, and at least 20 of them fell into the category of "downer" cows, animals whose condition can't be explained by injury. It is these "downer" cows that are considered to be the highest risk for mad cow disease.

Department regulations prohibit the slaughter of "downer" cows for any reason. The report said it's possible more suspect cattle are entering the food supply because USDA's record keeping is in need of improvement.

The Inspector General's report said auditors found no cases of banned tissues entering the human food supply.

USDA's Food Safety and Inspection Service, which is responsible for slaughter house inspections, said it will clarify its policy for slaughtering downer cattle and issue new guidance to its more than 6,000 inspectors as soon as possible.

The regulations excluding "downer" cattle from the food supply were initiated after the first case of mad-cow disease was identified in the U.S. in December 2003. Mad-cow disease attacks the brain of livestock. It has been blamed for more than 150 human deaths in Britain.

If you're like most Web surfers, chances are that you never think about how you access content online. You run searches with Google, shop at Amazon, and read the news at CNN or MSNBC, no matter if you're at home, work, or elsewhere.

The universal accessibility of the Internet has made it an essential tool for accomplishing daily tasks and providing information across the globe.

But a regulatory debate is brewing in Congress that may lead to a system where companies provide "preferred access" to some Web content services over others.

Imagine not being able to access Yahoo's Web portal as quickly from your Internet service provider, because the company that owns the cable lines has cut a deal with Google to provide their services exclusively.

The Senate Commerce Committee is holding a Feb. 7th hearing on "Net Neutrality," the principle that the network upon which the Internet is built should be free of commercial control and accessible by any agency. Because telecommunications companies can't force consumers to pick specific Internet providers, this has led to the proliferation of choice and diversity of content that makes the Internet what it is today.

Major telecommunications companies such as Verizon and AT&T wish to change that. Fueled by discontent over Internet content providers offering expensive, broadband-soaking services such as video streams and online roleplaying games, the telecom companies want to start charging Internet companies for the services they offer.

SBC (now AT&T) chairman Ed Whiteacre claimed that his company deserved a return on investment for letting content providers use his "pipes" free.

"[T]here's going to have to be some mechanism for these people who use these pipes to pay for the portion they're using. Why should they be allowed to use my pipes?"

Jeff Chester, executive director of the Center for Digital Democracy, sees a scenario where customers will face a multi-tiered system of paying more money in order to gain better Internet access.

"Under the plans [telecom companies] are considering, all of us -- from large to small content providers to individual users -- will have to pay more when surfing online, streaming videos, or perhaps even sending and receiving email, " Chester said in a Feb. 1 essay.

"Companies are mulling the imposition of new subscription plans that will limit our online experience. There will be 'gold,' 'bronze,' and 'silver' forms of Internet access that tightly define what they call our 'level of service.' Gone will be the more open and nondiscriminatory network of today."

Pay to Play

Another effect of paying telecom companies for content services would be the stifling of innovation on the Web. Everything from file-sharing to blogging to wikis has come about from innovative users and small companies with big ideas.

The established content giants like Google, Yahoo, AOL, etc. can afford to pay telecom companies to make sure their services reach consumers, but the "little guy" may not have the raw cash necessary to compete in a "pay to play" Internet model.

A 2004 policy analysis by the Cato Institute claims to debunk the "pay to play" notion for equal access to the Internet.

According to author Adam Thierer, consumers can best benefit from letting the market decide whether or not "bundled" services favored by providers are of greater benefit than letting the user access their particular content choices, regardless of what the provider favors.

Thierer points out that many providers already have restrictions on the services users subscribe to, including downloading limits, prohibitions against spamming, and so on.

"In light of the significant risks and investments [telecom] companies undertook to extend service to millions of Americans who previously had no such luxury, it seems somewhat insulting for certain consumers or regulators to claim that they have the right to dictate the terms and conditions of service, " Thierer said.

Groups such as Consumers Union and the Consumer Federation of America (CFA) strongly disagree. In their view, companies that bundle services in order to gain profit from advertising and reduce costs will push those services at the expense of others, even if it means denying Web users access to them.

The CFA released a 2005 survey that found 70 percent of the respondents were concerned about their Internet service provider blocking access to their particular choices of content; 75 percent were concerned about not having a choice between different providers or having to pay extra fees for Internet content services.

Web-based companies such as Google, Amazon, and Yahoo have teamed up with groups such as Consumers Union, CFA, and Common Cause to prevent the restriction of access to content over the Internet.

Net neutrality supporters believe that a "pay to play" Internet model would favor expensive business customers and corporate networks over consumers and nonprofit enterprises and struggling small publishers.

"The nonprofit and noncommercial sector could be distinguished from the for-profit sector of the online community in terms of services offered, and would suffer because they cannot compete in an environment where they have to pay for better service," according to a Common Cause publication.

The Debate

Several Internet analysts and members of the Federal Communications Commission (FCC) have already weighed in on how net neutrality may affect FCC Chairman Kevin Martin's goal of "universal, affordable access to broadband technology."

Unfortunately, Martin has not matched his sweeping vision with policy decisions.

When asked about the possibility of telecom companies locking out consumer choice, Martin said that he "was hesitant to adopt rules that would prevent anti-competitive behavior where there hasn't been significant evidence of a problem."

Michael Powell, the former FCC chairman, had been a strong supporter of Net neutrality, evoking the policy as one of his "four rules of Internet freedom."

Martin had just succeeded Powell when the Supreme Court ruled in favor of the FCC in the "Brand X" decision, which allowed cable Internet providers to prevent smaller rivals from sharing their lines and offering their own services.

The U.S. has been criticized harshly for slow development and dissemination of broadband technology throughout the country. The U.S. currently ranks fifteenth in the world in terms of market broadband penetration, and 60 percent of American households still cannot afford broadband or don't have access to it in their community.

In a letter to Congress in Nov. 2005, Google advisor and Internet guru Vinton Cerf advocated Net neutrality policies as championing innovation and free content access for all users.

"Telephone companies cannot tell consumers who they can call; network operators should not dictate what people can do online," Cerf said. "I am confident that we can build a broadband system that allows users to decide what websites they want to see and what applications they want to use and that also guarantees high quality service and network security."

AOL and Yahoo are planning to begin charging what amounts to postage for those sending multiple email messages to their subscribers. They're positioning it as an anti-spam measure, but it will also have hamper distribution of free information by small and non-profit publishers.

AOL and Yahoo are among the world's largest provider of email accounts. Google, which operates the fast-growing Gmail service, and Microsoft, which operates Hotmail, have not announced any plans to levy charges on those sending multiple messages to their subscribers.

AOL and Yahoo say the charge will amount to a penny or less per email. Senders will also have to promise to send only to people who have asked to receive their messages.

The new program will supposedly help reduce junk mail, scams, phishing expeditions and other annoying and dangerous Web plagues.

Although details of the companies' plans were not released, The New York Times reported that AOL will still accept email from senders who have not paid but will not guarantee that their mail doesn't get caught in spam filters.

Mail that comes from addresses users have added to their AOL address book will be delivered normally.

Critics Warn of Backlash

Critics say the companies run the risk of alienating both their subscribers and the companies and institutions that send bulk emails. Many publishers and organizations send large amounts of legitimate email and might urge their readers to switch to Google or Microsoft email or other services that don't levy a fee on senders.

It's not only mass emailings that would be affected by the system. Order confirmations, boarding passes and other individualized emails from addresses that send large amounts of email would be treated as trash under the new system unless the fee was paid.

AOL and Yahoo are working with Goodmail Systems to implement the paid email program. Goodmail, of Mountain View, Calif., said it will charge from 1/4 cent to 1 cent per message, giving the biggest discounts to the biggest mailers.

Although it is being presented as a tool to fight spam, many critics see the initiative as a money-making ploy.

Spam has leveled off in recent years as legal penalties have gotten tougher and, more significantly, as Internet service providers and large corporations have developed blacklists that identify and block suspected spam.

In fact, AOL already imposes complex procedures on those sending emails to large numbers of AOL subscribers. The restrictions are an administrative headache that have added a new layer of expense to organizations that have come to rely on email to communicate with their members and associates.

Readers' Responsibilities

A particular annoyance to legitimate publishers and organizations is the large number of Internet users who sign up to receive emails, then forget they signed up and complain about what they incorrectly describe as unsolicited mail.

Many users are also unwilling to take the time to manage their email subscriptions properly. Instead of reading the "unsubscribe" directions that all legitimate publishers include on their emails, they complain to their ISP, claiming they were not able to cancel their subscription.

"Irresponsible readers are a big problem for legitimate operators," said one Internet publisher who asked not to be identified. "Readers who receive valuable information completely free of charge need to take a little time to uphold their end of the bargain by reading and following the instructions."

Lawyers for John Kiel Patterson charge the mp3 players are "inherently defective" in design and do not provide sufficient warning to consumers that the volume could result in hearing loss. The suit says the iPod can produce sounds at more than 115 decibels, which it says can damage hearing if exposed to as little as a half minute per day.

Patterson's suit says he bought an iPod in 2005 but does not make a claim that his hearing has been damaged. His lawyers argue the point of the suit is to dramatize the potential of the iPod to cause permanent damage to millions of consumers who have and who will purchase the product.

Currently the iPod comes with a warning that says "permanent hearing loss may occur if earphones or headphones are used at high volume." But the suit says the headphones that come with the iPod actually contribute to hearing loss because they do not dilute the sound entering the ear and are closer to the ear canal than other sound sources.

Apple has sold more than 42 million iPods since they went on sale in 2001. The company declined to comment on the suit.

Despite a massive recall announced in September, Ford trucks are continuing to catch fire and burn -- some of them covered by the recall, some not.

The September 2005 recall involved an estimated 3.8 million Ford trucks from the 1994-2002 model years; it included the Ford F-150 pickup as well as the Ford Expedition, Lincoln Navigator and Ford Bronco SUVs.

But the recall is moving slowly. Ford says replacement parts are not yet available. Meanwhile, trucks continue to burst into flames and -- in many cases -- Ford representatives stonewall the affected consumers despite the recall, according to reports filed with ConsumerAffairs.com.

Adding fuel to the flames, recent fires suggest additional Ford trucks are afflicted by the flaw that led to Ford's reluctant and long-delayed recall.

Melted Mess

Linda of Newman, Georgia, lost her 2003 F-150 to fire January 31. "It is destroyed. I am waiting for my insurance claim adjuster to contact me," she wrote. Linda called her Ford dealership and was told there are no recalls for her F-150. The recall does not cover 2003 models.

"My truck was only two and a half years old and I still owe $14,500 for it," she told ConsumerAffairs.com. "It is destroyed and a melted mess sitting in my driveway."

Linda wants to know if Ford is going to do anything to help. So far the answer to Linda is the same as that given to millions of other truck owners -- no. Ford stubbornly resisted recalling the trucks and gave in only after several people died in related fires and the resulting publicity put pressure on regulators.

Ford has now reluctantly recalled 3.8 million vehicles to fix a cruise control flaw identified as a possible cause of the fires.

Hilton Head Inferno

Steve's Ford truck sat in his Hilton Head, South Carolina, driveway on a cold January morning. "At 3 a.m. in 33-degree weather our 1998 Ford Explorer exploded in flames causing my 1994 Buick Century to go up in flames as well," he wrote ConsumerAffairs.com.

"The fire investigator ruled the fire a result of 'unknown causes' although he states that the fire started in the engine of the Explorer and no arson or foul play was involved," Steve wrote.

Steve has complained to Ford, but so far has not received an answer.

Vinyl Siding Meltdown in Texas

Mary of Liberty Hill, Texas, is lucky. Her 1997 Ford F-150 caught fire but the blaze was put out before the fire could consume her house.

"On Saturday, January 14, 2006, the 1997 Ford F-150 parked in the driveway caught fire. No one in the house was aware of the fire, and a passing bicyclist came running in the house shouting that a truck was on fire in the driveway," Mary wrote.

Luckily the fire was extinguished with a garden hose but the flames damaged a three-week old car also in the driveway. "The fire also melted the vinyl siding on the house, which is only 4 years old," Mary told ConsumerAffairs.com.

Mary's 1997 F-150 is covered by the Ford recall. Ford however, is delaying repairing the potential fire hazard in the cruise control system of Mary's truck and 3.8 million more pickup trucks and sport utility vehicles because replacement parts are not yet available.

Mary's automobile insurance is paying for the value of the truck, and is paying to repair the damage to the new car. However, both vehicles are separate claims, and each claim has a $500 deductible. So Mary is out $1,000 thanks to her Ford F-150 fire.

Her house is another matter. "The insurance does not cover the damage to the house, and a claim will not be filed for that damage, because the repair cost is so close to the amount of the deductible," she said.

February 1, 2006
Maytag is recalling about 2.3 million Maytag and Jenn-Air brand dishwashers because of a fire hazard.

Liquid rinse-aid can leak from its dispenser and come into contact with the dishwasher's internal wiring which can short-circuit and ignite, posing a fire hazard, the company said.

Maytag has received 135 reports of dishwasher fires, resulting in product and/or property damage. Four injuries have been reported, including three reports of smoke inhalation and one serious hand laceration when operating a fire extinguisher to put out a fire in the dishwasher.

The recall involves Maytag and Jenn-Air under counter or portable plastic tub dishwashers. The dishwashers have black, white, almond, bisque and stainless steel front panels. The following model and serial numbers are printed on a label located on the dishwasher's plastic frame on top of or to the left of the door opening. Consumers should contact Maytag to determine if their dishwasher is included in this recall.

The units were sold by department and appliance stores and by homebuilders nationwide from July 1997 through June 2001 for between $370 and $800.

Consumers should immediately stop using these dishwashers, disconnect the electric supply by shutting off the fuse or circuit breaker controlling it and inform all users of the dishwasher about the risk of fire. Contact Maytag for either a free in-home repair, or a $75 cash back reimbursement following the purchase of a new Maytag, Jenn-Air, Whirlpool or KitchenAid dishwasher. Consumers should not return the dishwasher to the retailer where it was purchased, as retailers are not prepared to take units back.

Consumer Contact: For more information, contact Maytag Corporation at (800) 675-0535 anytime, or visit the firm's Web site at www.repair.maytag.com

The recall is being conducted in cooperation with the U.S. Consumer Product Safety Commission (CPSC).

Labeled "the calorie burner" on cans, Enviga is marketed as a weight-loss aid, with claims that it has "negative calories" and that it can "keep those extra calories from building up."

Enviga's web site also says the drink is "much smarter than following fads, quick fixes, and crash diets."

But according to scientists from the Center for Science in the Public Interest (CSPI), Enviga is just a highly caffeinated and over-priced diet soda, and is exactly the kind of faddy, phony diet aid it claims not to be.

The suit was filed in U.S. District Court in New Jersey, part of the region in which the beverage is being introduced.

In December, CSPI served formal notification on Coke and Nestle (and their partnership, Beverage Partners Worldwide) that they would be sued if they continued to use the unsubstantiated calorie-burning and weight-loss claims on Enviga labels and ads, but the company indicated publicly and privately that it had no plans to change the claims.

Enviga consists of carbonated water, calcium, concentrated green tea extract, various "natural flavors," and ingredients typically found in diet soda, such as caffeine -- three diet colas' worth -- phosphoric acid, and the artificial sweeteners aspartame and acesulfame potassium. The company says its green tea extracts are high in an antioxidant called epigallocatechin gallate, or EGCG.

Many of Enviga's claims are based on a 72-hour Nestle-funded study of 31 people who were given a drink containing amounts of EGCG and caffeine equivalent to three cans of Enviga. On average, those subjects expended more energy, according to an abstract of the unpublished study.

CSPI maintains no test of Enviga lasted more than three days. One European study found that EGCG and caffeine did not increase energy expenditure after one month and did not help people lose weight.

One longer-term Japanese study did show that a tea fortified with EGCG and caffeine helped people lose more weight than a control tea, but then again, the study was conducted by a tea company and the subjects of the study were 38 of that company's male employees.

Enviga costs between $1.29 and $1.49 per can, and the company suggests that the maximum effect is gained by drinking three cans a day, or about $1,500 worth of the soda per year.

"There is no clear evidence that what's in Enviga will help you control your weight," said CSPI senior nutritionist David Schardt. "You'd be much better off giving up non-diet soda, which costs nothing to do, or by joining a gym, which is typically less expensive than paying for 3 cans of Enviga a day."

The Government Accountability Office, Congress' investigative agency, has reportedly agreed to study how the airline industry handles its pensions. The news comes as United Airlines prepares to emerge from bankruptcy, having jettisoned its employee pensions.

The investigation was requested by two members of Congress, Rep. Ed Markey (D-Mass.) and Rep. George Miller, (D-Calif.), according to the Aircraft Mechanics Fraternal Association.

"Massive failures of pension plans at United Airlines and other companies are placing an enormous strain on employees and retirees who worked hard to earn their pension benefits," Markey said.

Markey says there may be quite a bit for the GAO to investigate. He points to alleged conflicts of interests cited in a Securities and Exchange Commission report on the subject. Markey said the report details secret financial deals between pension advisors, money managers and others, that may have negatively impacted pension fund investments.

The union is calling for a full-scale federal audit of airline pension plans. The AMFA says United and US Airways have used bankruptcy protection to set aside pension liabilities, pushing off retirement plans on the taxpayers.

A federal agency, which acts as pension guarantor of last resort, is running a significant budget deficit. Even so, it pays only a percentage of the defaulted pensions.

Now with Delta Air Lines and Northwest Airlines currently in Chapter 11 bankruptcy, union officials say those airlines will also have the ability to negate contracts and jettison their pension plans.

The bank routing information of as many as 1,100 subscribers who pay by check was also exposed, according to Boston Globe publisher Richard Gilman.

"We deeply value the trust our subscribers place in us and are working diligently to remedy this situation," Gilman said in a statement. "Immediate steps have been taken internally at the Globe and the Telegram & Gazette to increase security around credit card reporting."

The error occurred when the Telegram-Gazette printers used recycled internal reporting slips, which contained credit card information, to print out their packing bundle slips. The Telegram-Gazette and the Globe share the same distribution system.

Gilman said the practice of using recycled slips would stop immediately.

The breach was first discovered by a store clerk in Cumberland Farms, Mass. The publishers have been trying to recover as many papers as possible, but admitted that most may have been thrown out.

The Globe has a circulation of approximately 450,000 subscribers, while the Telegram-Gazette has a daily readership of 81,000 for its Sunday edition. Both papers are owned by the New York Times Corporation.

The publishers contacted the four major credit card companies -- Visa, MasterCard, American Express, and Discover -- to advise them of the snafu. The company offered to provide the credit card companies with the data of customers who may have been affected, according to the Globe press statement. Visa and MasterCard have asked for the information.

The publishers have also set up a toll-free number, 1-888-665-2644, for customers to call and verify if their information was exposed.

By Martin H. Bosworth
ConsumerAffairs.com

February 1, 2006
When telecommunications giant SBC bought AT&T and adopted the famous brand name as its own, it also inherited a lot of baggage, including an apparent inability to protect the privacy of its customers' records.

The company is facing a lawsuit for its part in allowing the National Security Agency (NSA) to conduct surveillance on its customers, via granting the NSA access to their vast databases of customer records and information.

AT&T is also potentially facing fines from the Federal Communications Commission (FCC) for failing to properly certify that its customers' records were safeguarded.

The Electronic Frontier Foundation (EFF) filed a class-action suit against AT&T in San Francisco yesterday (Jan. 31).

According to the filing, AT&T provided the NSA "with direct access to all or a substantial number of the communications transmitted through its key domestic telecommunications facilities, including direct access to streams of domestic, international and foreign telephone and Internet communications."

AT&T's cooperation enabled the NSA to "data-mine" the phone and Internet records for "suspicious" information, and to track communications that might lead to potential terrorist activity.

The NSA's surveillance program has been criticized for violating Americans' Fourth Amendment rights to defend against unwarranted searches and seizures. The EFF lawsuit also considers AT&T's actions a violation of the First Amendment right of freedom of speech, as well as numerous laws governing telecommunications privacy and wiretapping.

"Our goal is to go after the people who are making the government's illegal surveillance possible," Kevin Bankston, EFF staff attorney, told Wired magazine.

Failing Certification

Meanwhile, the FCC proposed fining AT&T $100,000 for failing to provide data certifying that it had complied with federal safeguards to protect customer privacy.

In the FCC's "Notice of Apparent Liability for Forfeiture," issued Jan. 30th, the agency stated that all major telecommunications companies had to verify their protection of their customers' proprietary network information ("CPNI"), or calling records.

AT&T had provided information on its customer safeguards in its prior incarnation as SBC, but not as the old AT&T corporation.

The report concluded that "AT&T has apparently failed to comply with the requirement that it have an officer certify on an annual basisthat AT&T has established operating procedures adequate to ensure compliance with the Commission's CPNI rules. For this apparent violation, we propose a forfeiture."

The $100,000 fine was also levied against telecom carrier Alltel for failing to fulfill the certification. Both companies can avoid the fine if they provide more information on their security procedures.

SBC posted earnings of $1.6 billion for the 4th quarter of 2005, after its acquisition of AT&T.

The sale of calling records to third-party companies has provoked investigations from numerous national newspapers, and calls to Congress for stronger legislation governing the protection of customers' information.

Sprint Nextel, T-Mobile, Verizon Wireless, and the states of Illinois and Missouri have all filed lawsuits against All Star Investigations, the company behind Web sites such as Locatecell.com, implicated for selling cellphone and land line records to third parties.

A federal judge has ordered Net Everyone and its owners to stop sending unsolicited pornographic e-mails.

The judge acted on a complaint by the Federal Trade Commission, which charged the company with sending deceptive, unwanted e-mails promoting sexually oriented Web sites, and routing them through other people's computers without their knowledge or consent.

Since at least April 2005, according to the Commission, the defendants have relayed commercial e-mails through home computers infected with viruses and other "malware" that allows distant parties to control them. The e-mails had racy images like those on the Web sites they promoted.

People who control infected computers (spam zombies) group them as "botnets," which they rent or sell for bulk e-mailing. Botnets, which allow bulk e-mailers to conceal the source of their spam and evade spam filters, are used as "relays" or "proxies" that make it appear as if spam came from the zombies and not the source.

According to the FTC, the defendants shopped Web sites frequented by spammers, seeking vendors who can provide networks of thousands of zombies.

The FTC charged the defendants with violating its Adult Labeling Rule and the CAN-SPAM Act (Controlling the Assault of Non-Solicited Pornography and Marketing) by sending the e-mails without recipients' permission, not stating "SEXUALLY-EXPLICIT" in subject lines, and hiding the sending computer's identity by using hijacked computers and misleading e-mail headers.

Sending spam through unauthorized relay computers is an aggravated violation of CAN-SPAM. The FTC pursued this matter with assistance from Microsoft Corporation.

On January 19, a U.S. district court judge ordered an ex parte temporary restraining order freezing the assets of William Dugger, a/k/a Billy Johnson, and Angelina Johnson, both of whom reside in Hawaii, and John Vitale, who resides in Arizona, all doing business as Net Everyone.

The FTC ultimately seeks to permanently bar them from further violations and make them forfeit their ill-gotten gains.